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Thursday, April 4, 2002
Ohio town banker is accused of embezzling millions

By John Seewer
Associated Press
Village of Oakwood lost all of its $350,000 savings; school is still short near $700,000
   OAKWOOD, Ohio - Just about every morning Mark Miller would walk through the back door of the town's bar and grill and say hello to the regulars.
   Talk over coffee usually centered on the weather and sports at the high school, where Miller was a fixture on the board. His brother was the school's principal and family members helped coach its teams.
   Then, the bank executive vice president would walk next door to work at the Oakwood Deposit Bank, where federal prosecutors say he embezzled $40 million for years from friends and neighbors in the farming town of 700 people.
   "You wonder why he would do that to us," said Gail Gribble, who works at a restaurant near Miller's home. "It's not like we're strangers."
   The Federal Deposit Insurance Corp. seized and closed the bank's two branches in Oakwood and nearby Grover Hill on Feb. 1. The bank has reopened under the management of The State Bank and Trust Co., a northwest Ohio-based bank.
   The collapse of the town's only bank, which stood since 1905 and weathered droughts and the Depression, has stunned and saddened folks in northwest Ohio's farmbelt. It has left a school district and a community struggling to recover.
   Trust is lost
   It wasn't just the money. The Oakwood Deposit Bank was a place they relied upon.
   "We tend to trust people more around here because we know them," Gribble said. "I'm starting to think I don't know anybody."
   Miller invested much of the money in casino boats in the South, prosecutors said. They said he also bought a horse farm and timeshares - all while living with his wife and three children in a modest single-story brick home.
   Federal investigators say Miller, 47, of Grover Hill, admitted that he had manipulated bank records since at least 1999, according to an FBI affidavit.
   Miller has pleaded innocent to charges of money laundering and embezzlement. His attorney and family have refused to comment since his February arrest. He is free on $1 million bond but confined to his house.
   The FDIC, which insures accounts for up to $100,000, said the bank had total deposits of $102 million. Many people have gotten their money back, but at least $9 million in deposits were uninsured. Stockholders have lost everything - a total of about $6 million.
   'We're in trouble'
   The Wayne Trace school district and the county-owned hospital each lost nearly $1 million. And the village of Oakwood lost all its $350,000 savings, forcing it to lay off five workers and cut everything but emergency repairs.
   "We're in trouble. Big trouble," said Bud Henke, Oakwood's village council president. "All the town's money was in there."
   Federal Reserve Governor Susan Schmidt Bies was asked about the bank failure while in Columbus recently and said the banking system cannot prevent fraud. The only thing banks can do is have internal controls in place to guard against harm, she said.
   At first it appeared that only Oakwood bank's stockholders lost money. But investigators discovered the bank had no outside collateral to protect funds deposited by the school district and village as state law requires.
   The losses included $450,000 the school district raised so it could get $15.6 million from the state to renovate and add to its two elementary schools and high school. Those construction plans are on hold.
   "It leaves everything up in the air," school Superintendent Ken Doseck said.
   Miller gave the school paperwork that said securities protecting its money were in safekeeping at two Cleveland banks, according to a letter the district released.
   "We did everything correctly. We did nothing different than any other school district did," Doseck said.
   School short $700,000
   The district has been able to recover $256,000 in bonds, but it still is short nearly $700,000.
   School leaders cannot believe Miller, who spent 14 years on the board, is accused of fraud.
   "I sat on that board with him for six years and I'd never expected this," said board president Michael Brady. "We all get along real well."
   Meanwhile, Oakwood's leaders are trying to figure out how to cover the $350,000 the village lost. There were no securities protecting the village's money either, but it did get back $100,000 insured by the FDIC.
   The village council doesn't have enough money to make its annual payment to the federal government for its new sewage plant and street repairs are in doubt.
   Janet Ross, who runs a gas station in Grover Hills, said she and her husband lost $40,000 in stock that they planned to pass on to their children.
   "The saddest thing is that he destroyed a business that's been here through some real hard times," she said.

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